The plan was part of a wider Saudi proposal for the GCC states to form a union ostensibly aimed at strengthening them against Iran.
Qatar, Oman, the United Arab Emirates and Kuwait were said to be wary of Saudi dominance, but Bahraini officials indicated a bilateral union would be announced this week.
Saudi-led GCC troops went into Bahrain last year to crush an opposition movement dominated by the majority Shia population.
Bahrain
